SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ------------------ Date of Report (Date of earliest event reported): May 19, 2004 - ------------------------------------------------------------------------------- FOOT LOCKER, INC. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) New York No. 1-10299 13-3513936 - ---------------------------- ------------- -------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 112 West 34th Street, New York, New York 10120 - ------------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 720-3700 --------------
Item 5. Other Events. On May 19, 2004, Foot Locker, Inc. announced that it had entered into a five-year $175 million amortizing term loan with its existing bank group and amended and extended to 2009 its revolving credit agreement. Item 7. Financial Statements and Exhibits. (c) Exhibits 99.1 Press Release of Foot Locker, Inc. dated May 19, 2004 reporting operating results for the first quarter of 2004. Item 12. Results of Operations and Financial Condition On May 19, 2004, Foot Locker, Inc. issued a press release announcing its operating results for the first quarter of 2004. A copy of the press release is attached as Exhibit 99.1, which, in its entirety, is incorporated herein by reference. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned being hereunto duly authorized. FOOT LOCKER, INC. ----------------------------------- (Registrant) Date: May 19, 2004 By: /s/ Bruce L. Hartman ------------------------------- Bruce L. Hartman Executive Vice President and Chief Financial Officer 2
EXHIBIT 99.1 FOOT LOCKER, INC. N E W S R E L E A S E CONTACT: Peter D. Brown Vice President, Investor Relations and Treasurer Foot Locker, Inc. (212) 720-4254 FOOT LOCKER, INC. REPORTS FIRST QUARTER RESULTS o Income Per Share from Continuing Operations Increased 15 Percent to $0.31 o Company Expects Its Second Quarter EPS to Increase 10-to-20 Percent o Re-confirms Expected Full-Year EPS To Increase 10-to-20 Percent o Cash Position, Net of Debt, Increased By More Than $100 Million; Strengthened Financial Position NEW YORK, NY, May 19, 2004 - Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, today reported financial results for its first quarter ended May 1, 2004. Financial Results Income from continuing operations for the Company's first quarter ended May 1, 2004, increased 15 percent to $0.31 per share, or $47 million, compared with $0.27, or $39 million last year. For the 13-week first quarter period, sales increased 5.1 percent to $1,186 million this year compared with sales of $1,128 million last year. First quarter comparable-store sales increased 0.3 percent. "Our first quarter financial performance was in line with our expectations and the earnings guidance we previously communicated," stated Matthew D. Serra, Foot Locker, Inc.'s Chairman and Chief Executive Officer. "We are pleased with the financial and strategic progress made during the first quarter. We are also pleased, following the end of the quarter, to have completed our acquisition of the Footaction chain. Given our solid first quarter financial results, we have more confidence in our ability to increase income per share from continuing operations in both our second quarter and full year by 10-to-20 percent." Financial Position The Company's financial position strengthened as its cash position, net of debt, increased by $105 million from the same period last year. Merchandise inventories are well positioned to support the Company's recent acquisition of approximately 350 Footaction stores as well as the Company's existing business and planned new store openings. Taking advantage of current favorable conditions in the interest rate environment, the Company elected to finance a portion of the purchase price of its recently acquired Footaction stores through a 5-year, $175 million amortizing term loan with its existing bank group. The initial interest rate on the LIBOR-based, floating-rate loan is 2.625 percent. The Company also amended and extended to 2009 its revolving credit agreement to be co-terminus with the final maturity of the term loan. On April 20, 2004, the Company provided notification to The Bank of New York, as Trustee under the indenture, of its intent to redeem the entire $150 million outstanding 5.5% convertible subordinated notes. As a result of this redemption notification, the Company expects that most holders will convert their notes into shares of Foot Locker, Inc. common stock, on or before June 3, 2004, at a conversion price of $15.806 per share. Foot Locker, Inc. 112 West 34th Street, New York, NY 10120
Mr. Serra continued, "Maintaining a strong financial position and working towards an investment grade credit rating remains a high priority for our Company, and we believe that the continuing progress we have made in enhancing our financial position and balance sheet is moving us closer towards this goal. Along these lines, we are focused on remaining financially prudent as we pursue new investment opportunities, as evidenced by the completion of the new financing arrangement in connection with our Footaction stores purchase. Store Base Update During the first quarter of 2004 the Company opened 21 stores, remodeled/relocated 119 stores and closed 44 stores. At May 1, 2004, the Company operated 3,587 stores in 16 countries in North America, Europe and Australia. The Company is hosting a live conference call at 10:00 am (ET) on Thursday, May 20, 2004 to review 2004 first quarter results, discuss our 2004 outlook and Footaction acquisition, and respond to analysts' questions. This conference call may be accessed live from the Investor Relations section of the Foot Locker, Inc. website at http://www.footlocker-inc.com. The conference call will be available for webcast replay until 5:00 pm on Monday, May 24, 2004. Disclosure Regarding Forward-Looking Statements This press release contains forward-looking statements, which reflect management's current views of future events and financial performance. These forward-looking statements are based on many assumptions and factors detailed in the Company's filings with the Securities and Exchange Commission, including the effects of currency fluctuations, customer demand, fashion trends, competitive market forces, uncertainties related to the effect of competitive products and pricing, customer acceptance of the Company's merchandise mix and retail locations, the Company's reliance on a few key vendors for a majority of its merchandise purchases (including a significant portion from one key vendor), unseasonable weather, risks associated with foreign global sourcing, including political instability, changes in import regulations, disruptions to transportation services and distribution, and the presence of severe acute respiratory syndrome, economic conditions worldwide, any changes in business, political and economic conditions due to the threat of future terrorist activities in the United States or in other parts of the world and related U.S. military action overseas, the ability of the Company to execute its business plans effectively with regard to each of its business units, including its plans for the marquee and launch footwear component of its business, and its plans for the integration of the Footaction stores. Any changes in such assumptions or factors could produce significantly different results. The Company undertakes no obligation to update forward-looking statements, whether as a result of new information, future events, or otherwise.
FOOT LOCKER, INC. Consolidated Statements of Operations (unaudited) Periods ended May 1, 2004 and May 3, 2003 (In millions, except per share amounts) - ------------------------------------------------------------------------------------------------- First Quarter First Quarter 2004 2003 -------------- -------------- Sales $ 1,186 $ 1,128 Cost of sales 826 783 Selling, general and administrative expenses 248 241 Depreciation and amortization 34 37 Interest expense, net 4 5 ------- ------- 1,112 1,066 ------- ------- Income from continuing operations before income taxes 74 62 Income tax expense 27 23 ------- ------- Income from continuing operations 47 39 Income on disposal of discontinued operations, net 1 -- Cumulative effect of accounting changes, net (1) -- (1) -------- -------- Net income $ 48 $ 38 ======== ======= Diluted EPS: Income from continuing operations $ 0.31 $ 0.27 Loss on disposal of discontinued operations -- -- Cumulative effect of accounting changes, net of income taxes (1) -- (0.01) -------- ------- Net income $ 0.31 $ 0.26 ======== ======= Weighted-average diluted shares outstanding 156.2 151.3 ------------------------------------------------------------------------------------------ (1) Related to adoption of SFAS No. 143, "Accounting for Asset Retirement Obligations." - MORE -
FOOT LOCKER, INC. Condensed Consolidated Balance Sheets (unaudited) (In millions) ------------------------------------------------------------------------------------------------ May 1, May 3, 2004 2003 ------- ------- Assets CURRENT ASSETS Cash and cash equivalents $ 392 $ 306 Merchandise inventories 1,051 941 Assets of discontinued operations 2 2 Other current assets 151 90 ------- ------- 1,596 1,339 Property and equipment, net 640 626 Deferred tax assets 191 233 Other assets 333 333 ------- ------- $ 2,760 $ 2,531 ======= ======= Liabilities and Shareholders' Equity CURRENT LIABILITIES Accounts payable $ 370 $ 344 Accrued liabilities 279 254 Current liabilities and reserves for restructuring, discontinued operations and businesses held for sale 9 21 Current portion of long-term debt and obligations under capital leases 150 -- ------- ------- 808 619 Long-term debt and obligations under capital Leases (1) 182 358 Other liabilities (1) 355 401 SHAREHOLDERS' EQUITY 1,415 1,153 ------- ------- $ 2,760 $ 2,531 ======= ======= ------------------------------------------------------------------------------------------------ (1) Long-term debt and obligations under capital leases were reduced in 2004 by $5 million and increased in 2003 by $2 million, representing the fair value of interest rate swaps related to the Company's 8 1/2% debentures due in 2022. The Company's cash position, net of debt, calculation excludes the fair value of these interest rate swaps which are reflected in other liabilities. - MORE -
FOOT LOCKER, INC. Store and Estimated Square Footage (unaudited) (Square footage in thousands) ------------------------------------------------------------------------------------------------------- May 1, May 3, January 31, 2004 2003 2004 ---------------------- ---------------------- --------------------- Foot Locker U.S. Number of stores 1,436 1,458 1,448 Gross square footage 5,849 5,978 5,916 Selling square footage 3,402 3,469 3,447 Lady Foot Locker Number of stores 570 600 584 Gross square footage 1,270 1,335 1,303 Selling square footage 707 754 723 Kids Foot Locker Number of stores 350 370 357 Gross square footage 846 899 863 Selling square footage 504 535 514 Champs Sports Number of stores 580 588 581 Gross square footage 3,227 3,285 3,239 Selling square footage 2,221 2,305 2,244 Foot Locker International Number of stores 651 584 640 Gross square footage 1,864 1,645 1,823 Selling square footage 1,005 922 992 Total Athletic Group Number of stores 3,587 3,600 3,610 Gross square footage 13,056 13,142 13,144 Selling square footage 7,839 7,985 7,920 ------------------------------------------------------------------------------------------------------- -XXX-